China Armco Metals Secures $13 Million Line of Credit from Bank of China

Strategic Insights -

China Armco Metals, a distributor of imported metal ore, has secured a $13 million line of credit from the Bank of China for its scrap metal recycling project. The company plans to use the funds for working capital and fixed asset purchases, with operations expected to commence at its 1 million ton recycling facility in the fourth quarter of 2009. This move comes as the company reports record second quarter financial results, with revenue increasing by 71.2% to $22.5 million and net income rising to $3.37 million.

Key Takeaways:

  • China Armco Metals has secured a $13 million line of credit from the Bank of China for its scrap metal recycling project, with terms allowing for approximately $2.9 million to be used for working capital and the balance for fixed asset purchases.
  • The company plans to commence operations at its 1 million ton recycling facility in the fourth quarter of 2009, with the metal recycled sold for use in the production of steel within China, the largest producer and consumer of steel in the world.
  • The company's Chairman and CEO, Kexuan Yao, has commented that the additional capital will enable China Armco Metals to become one of the largest providers of scrap metal to the steel industry in China.
  • The company's record second quarter financial results include revenue increasing by 71.2% to $22.5 million, and net income rising to $3.37 million.
  • The company's gross profit for the first six months of 2009 was $4.63 million, compared to $2.1 million for the same period in 2008, with net income of $3.5 million, up from $2.5 million.
  • China Armco Metals has total assets of $38.13 million, an increase of over 30% from December 31, 2008, with shareholder equity reaching $18.76 million and working capital of approximately $6.15 million.

Statistics:

  • The company has secured a $13 million line of credit from the Bank of China for its scrap metal recycling project.
  • Approximately $2.9 million of the credit line will be used for working capital, with the balance for fixed asset purchases.
  • The company plans to commence operations at its 1 million ton recycling facility in the fourth quarter of 2009.
  • Revenue for the second quarter increased by 71.2% to $22.5 million, with net income rising to $3.37 million.
  • Gross profit for the first six months of 2009 was $4.63 million, compared to $2.1 million for the same period in 2008.
  • Net income for the first six months of 2009 was $3.5 million, up from $2.5 million.
  • Total assets increased by over 30% to $38.13 million from December 31, 2008.
  • Shareholder equity reached $18.76 million, with working capital of approximately $6.15 million.

Sources:

  • Marketwire via COMTEX, "Stock Market Alert's performance stock list includes: China Armco Metals, Inc. (OTCBB: CNAM), Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX), Newmont Mining Corporation (NYSE: NEM) and Century Aluminum Company (NASDAQ: CENX)"
  • China Armco Metals, Inc. press release, "China Armco Metals, Inc. Secures $13 Million Line of Credit from Bank of China for Scrap Metal Recycling Project"
  • Stock Market Alerts LLC, "Disclaimer regarding China Armco Metals, Inc. (OTCBB: CNAM)"